The ability to use experience to guide behavior (to learn) is one of the most remarkable abilities of the brain. Our goal is to understand how activity and plasticity in neural circuits underlie both learning and the ability to use learned information to make decisions. We have examined how information processing in the hippocampus changes as animals behavior changes. We found that that there is a smooth transition from greater CA3 to greater EC drive of hippocampal output area CA1 as animals move more quickly. Changes as function of moment speed are rapid and are most pronounced in new environments. The level of coordinated spiking activity in CA1 reflects that transition: cell pairs are highly correlated at low speeds and become progressively less correlated as animals move more quickly. These results suggest that behavior drives a dynamic balance between correlated activity representing stored associations and more independent sensory representations in the hippocampus. This dynamic balance is well suited to support the mnemonic functions of the hippocampal circuit, including the formation of reliable memories during exploration of new places. The goal of this grant is to investigate the mechanism that drives this dynamic balance. Currently available results suggest that cholinergic modulation from the medial septum and the ventral diagonal band of Broca (MS/DB) is central to regulating hippocampal circuits, so we will use multielectrode recording and targeted optogenetic manipulations in awake, behaving animals to determine the role of cholinergic inputs to the hippocampus in regulating moment-by-moment changes in hippocampal information processing. Our Specific Aims are: 1) Test the hypothesis that modulation of MS/DB input populations is sufficient to control the dynamic balance of information processing in the hippocampus and 2) Test the hypothesis that dynamic levels of MS/DB cholinergic neuron activity are important for rapid learning. The experiments carried out to accomplish these aims have the potential to provide a fundamental new understanding of the regulation of the many functions of the hippocampal circuit.